Below are some of the most frequently asked questions (FAQ) we receive. We have made every effort to answer as many questions as possible.

However, if the answer to your particular question does not appear in this FAQ, or if you would like further clarification, please Contact Us.

What is a Unit Investment Trust?

A unit investment trust (UIT) is a registered investment company that buys and holds a generally fixed portfolio of stocks, bonds, or other securities. Investors purchase units of the trust which represent an undivided ownership in the entire portfolio. UITs have a termination date that can range from one year to thirty or more years, depending on the type of holdings in the portfolio, and can fill a variety of investment goals and risk tolerance levels.

What are the different varieties available?

UITs invest in a wide range of securities, including municipal and corporate bonds, U.S. government securities, common or preferred stock (domestic and international), mortgage-backed securities, and international bonds.

How diversified are the holdings in a UIT?

A UIT diversifies its holdings by purchasing a variety of stocks or bonds. The trusts diversified investment portfolio helps reduce an investors risk by offsetting potential losses from some securities with potential gains in others. The average investor might find it expensive and difficult to construct a portfolio of individual securities as diversified as that of a UIT.

How easy is it to liquidate a UIT?

Although many investors purchase units with the intention of holding them until the trust terminates, UIT investors may sell their units at any time. The redemption price may be more or less than the price the investor paid initially.

How is a UIT different than a mutual fund and how are the securities selected?

The securities in a UIT are professionally selected to meet a stated investment objective, such as growth, income, or capital appreciation. UITs employ a buy-and-hold investment strategy: once the trusts portfolio is selected, its securities typically will not be sold or new ones bought, unlike mutual funds.

What are the Regulations and Disclosures?

Unit investment trusts are subject to stringent federal laws and oversight by the U.S. Securities and Exchange Commission (SEC). In addition to being regulated by the same federal securities laws as other publicly offered investments (under the Securities Act of 1933), UITs, like mutual funds and closed-end funds, are subject to the Investment Company Act of 1940. Click Here For More Detailed Information on UITs.